Sunday, August 21, 2011

What's Wrong with Most Indemnification Clauses in AMC Contractor Agreements?

AMC independent contractor agreements are now receiving more attention. A key issue that many appraisers and regulators have focused on is that many AMC contractor agreements use very one-sided indemnification clauses to attempt to shift financial liability for the appraisals the AMCs manage to individual appraisers. NAR recently wrote to federal regulators expressing serious concern that such AMC clauses are interfering with appraiser independence and hurting appraisal accuracy and quality -- i.e, if appraisers fear being sacked with unbearable liability based on an appraisal later being deemed faulty, some appraisers are more likely to "play it safe" by delivering lower opinions of value.

This post is mainly about the policy reasons why unfair indemnification clauses don't belong in AMC contractor agreements. If you're concerned, on the other hand, about the individual potential legal risk that such clauses create, I suggest that you read the following article on readimember.org (registration is required): Indemnity 101: Be Careful What You Promise.

This is not an attack on AMCs. In fact, as an attorney, I occasionally advise AMCs and assist them with

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Thursday, August 4, 2011

Free LIA/READI 4-Hour CE Seminar in St. Paul, MN on September 21, 2011

READI and LIA are presenting their 4-hour live CE seminar entitled "Loss Prevention Program for Real Estate Appraisers" on September 21, 2011 in St. Paul, MN.   The seminar is free to all appraisers who are registered with READI or insured by LIA.

Who sues the most appraisers? What do they sue for? Which lenders pose the most risk to appraisers? Who is more at risk: residential or commercial appraisers? Which AMCs have sued appraisers for indemnification? You'll get the answers at the seminar and, of course, 4 hours of CE credit.


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